Some short notes on thoughts and discussions I've had around AI over the last few weeks:

Jerry Neuman wrote an excellent piece that’s absolutely worth reading titled AI Will Not Make You Rich where he points out that technological revolutions often create much more downstream value by opening up new opportunities than they do for the innovators breaking new ground. I've written before about how technologies like the automobile led to highways, which led to suburbs, which led to superstores like Walmart, etc. The question with AI is, which companies will benefit most downstream from this new technology? It is surely industries with a high number of knowledge workers that can quickly become more productive, opening up a lot of new capital to invest in various new projects. The opportunity for healthcare feels enormous. In other words, healthcare companies don't necessarily become more valuable because they're using AI. Instead, they become more valuable due to the new capital generated from their use of AI, which can be invested in things we haven’t thought of yet.

Related, there's been a lot of talk about AI destroying jobs and the need for a universal basic income. There are two reasons I'm quite skeptical of this. First, Americans have become massively more productive through multiple technological revolutions (agriculture, industrial, information), and centuries later, we're still roughly at full employment. The burden is on the naysayers to explain why this time it's different. I haven’t heard a convincing explanation. Second, the reason I don't believe this time is different is that people discount human ambition and the unending desire for growth. If AI can replace workers, that translates into profits, and winning companies take those profits and invest them in new ideas that require more people to execute on. Sure, some companies will be able to reduce costs from AI, and instead of investing in new stuff, they'll return that capital to investors. Those investors will say thank you and then invest that capital into a company that is investing in new stuff. Pocketing profits instead of investing in growth is a losing game over the long term, and the money typically winds up in the right place.

Finally, one of the most interesting questions around AI for me is where the next wave of value in large language models will come from. The infrastructure layer (Nvidia, AMD) and the model layer (ChatGPT, Grok) have already captured enormous upside, not that you shouldn't invest in them, but you're kind of late. The big question is whether there’s a durable layer above the model, or if the model itself is the end product. Put differently: when you think about an LLM “product,” is it just a simple prompt in a ChatGPT-style interface, or does real product value emerge when LLMs are fused with unique data, workflows, and distribution?

The fun (and challenging) part of following and investing in AI at this stage is that it seems the task isn't to have the answers to all the questions; it's much more about figuring out the right questions to ask.